Barack Obama and the fiscal cliff

Epitaph for a mediator

RACIAL politics were a lot more charged back in 1991, when Derrick Bell, then a professor at Harvard law school, went on strike to demand the hiring of a black woman faculty member, and at the same moment inadvertently launched the political career of the student who would become America's first black president. In the midst of that polarised racial environment, Barack Obama, then a member of the law school's black students' association and president of its Law Review, made it clear that while he supported Mr Bell, his natural inclinations were towards compromise and conciliation. A video of a young Mr Obama delivering a speech to protesters, released early this year by the late Andrew Breitbart in the vain hope it would hurt Mr Obama's presidential campaign, shows him smoothing Mr Bell's ego and drawing laughs from the crowd with comically exaggerated flattery. At the same time, as Gary Kamiya noted in Salon when the video was released, Mr Obama "tried to find a middle ground in the bitter dispute." Mr Kamiya quotes from Thomas Sugrue's 2010 book, "Not Even Past: Barack Obama and the Burden of Race":

Obama positioned himself as someone who could reconcile Harvard’s bitter differences by bringing a tone of civility to the debate. He refused to denounce his critics and hurl polemics. In the words of Bradford Berenson, a conservative student who would later work in the second Bush administration, “Even though he was clearly a liberal, he didn’t appear to the conservatives in the review to be taking sides in the tribal warfare.”

Obama’s position in the middle allowed him to build a winning coalition of liberal and conservatives in his bid to be elected president of the Harvard Law review in February 1990. Later that year, in a dispute about the law review’s affirmative action policy, Obama again attempted to reconcile the opposing camps. He defended the principle of affirmative action while suggesting that he respected the “depth and sincerity” of its opponents beliefs.

The inclination to bridge ideological and partisan gaps became the defining trait of Mr Obama's character and of his political career. David Remnick, in his biography "The Bridge", wrote that during Mr Obama's time in the Senate, "conciliation was his default mode, the dominant strain of his political personality." In his 2008 speech on race, in his televised meetings with Republicans during the Obamacare negotiations, and in his meetings with Wall Street titans, Mr Obama has displayed the same pattern Mr Berenson recognised: first, he voices the concerns of the opposition in order to make it clear he understands and to some extent shares them. Then he puts forward a proposal he views as an acceptable compromise. Indeed, Mr Kamiya argues, the conciliatory impulse is Mr Obama's Achilles heel, the trait that at one point threatened to make a half-baked disaster of his presidency.

Obama has shown time and again that he will not get tough until he absolutely has to—and sometimes not even then. He’s conflict-averse. He prefers making beautiful speeches to taking on enemies, or committing himself to one position. He seems to always be slipping away from the fight, thinking he can have it both ways. It is a trait that got him elected, but it is his greatest weakness.

As of yesterday, Barack Obama, the great mediator, appears to have left the building. The proposal his administration has offered Republicans to avoid the fiscal cliff is a frankly Democratic proposal, reflecting Democratic priorities and economic beliefs. Mr Obama offers to achieve the necessary deficit reduction by raising $1.6 trillion in taxes over ten years, almost entirely from the rich, and by cutting up to $400 billion from the Medicare budget, if Republicans can come up with a proposal to do so. At the same time, the proposal extends the suspension of payroll taxes and long-term unemployment insurance, both measures targeted to aid the poor and middle class, and designed to minimise the contractionary hit the still-fragile US economic recovery will take next year if current law is not changed. This is progressive taxation and spending policy designed to reduce income inequality and protect the social safety net, reflecting a Keynesian belief in counter-cyclical economic policy focused on protecting demand by sparing the taxpayers most likely to spend rather than save. It's precisely what one might expect from a Democratic administration.

Whether Republicans will be able to put forward their own priorities and ultimately come to a compromise proposal depends on the GOP leadership, and on whether it now has enough control over its fractious, ideologically extremist tea-party backbenchers to be able to negotiate. The initial rhetoric coming from Mitch McConnell and John Boehner is not promising. But given the automatic tax hikes and spending cuts the Republicans will face if they fail to reach a compromise, and the fact that Mr Obama's proposals to hike taxes on the rich back to Clinton-era levels are overwhelmingly popular, it is difficult to imagine they will be able to avoid negotiating. And we've seen Republicans characterise Mr Obama's proposals as unacceptably left-wing before. In fact, that's what we've seen every time Mr Obama has come out with a proposal, regardless of how conciliatory those proposals were. When Mr Obama offered a health-care reform plan based on Republican proposals from the 1990s, when he offered to close the deficit with formulas including two dollars in spending cuts for every dollar of taxes raised, when he offered financial reform legislation that declined to break up large banks or ring-fence risky trading activities, Mr Obama encountered a blanket wall of Republican opposition and rhetoric painting him as the most radically left-wing president in history.

The old saw, which Robert Frost started retailing heavily in his late-life publicity blitz around JFK's inauguration, goes that "a liberal is a man too broadminded to take his own side in a quarrel." (Apparently the first available citation is actually from William Earnest Hocking, a Harvard philosophy professor, in 1942.) Mr Obama may at one point have had a vision of his presidency as standing above the partisan fray in Congress, brokering compromise. This seems not to be a time in which such a presidency is possible. The partisan incentives in current American politics prevent Republicans from giving Mr Obama any credit when he attempts to be pre-emptively conciliatory, and Mr Obama appears to have decided that in the fiscal-cliff negotiations at least, he's better off negotiating as an interested party, rather than as a mediator.

Great imagination! Obama as conciliatory is fiction of the first order. How much does the Economist get from the DNCC as water-carriage fee? His deficit proposal was $2 in imaginary spending cuts for every $1 in real additional taxation and how could the GOP refuse such an imaginary offer? Why BHO even yanked that offer back when the Boehner did accept it and insist on double that taxation increase. Obama has decided to drive the country over the fiscal cliff and he doeasn't care about the consequences. He'll shame with a sham 'deal' and expect the Economist to call it a 'fair proposal'.

In 2012, 53,952,240 votes were cast for a Democratic candidate for the House and only 53,402,643 were cast for a Republican — meaning that Democratic votes exceed Republican votes by more than half a million. So, any conclusion that the American people VOTED FOR a Republican house is JUST PLAIN WRONG.

Is there another so-called democracy in the world where the party that gets less votes retains a double digit lead in parliamentary or Congressional seats?

So when house Republicans try to tell us that the American people chose them, and their positions, we know that that is just not so.

It is time to go over the cliff, we had no great benefit from the Bush tax cuts, 2 unfunded wars, a prescription drug plan not paid for, and god knows unlimited unfunded liabilities for veterans care and other liabilities for promised medicare and social security benefits.

In addition to tax increases, we should also "means test" all medicare and social security benefits. Pete Peterson (who donates his social security ot his chartible foundation) could live with out it. And so could Uncle Warren!!!

BHO is a new one, did you coin that yourself? Does it bother you that Barack's middle name is Hussein? What if I told my middle name was Hussein? What if I told you my middle name was Reagan? How very disappointing.

Here we go again: the old lefty trope about what a reasonable centrist Obama is. Give. Me. A. Break. Just because a guy doesn't shout when making his points and claims he "understands the concerns" of his opponents does not make him a pragmatist.

No less a hate figure for the left than Dick Cheney was called personable and mild mannered during his time in the Senate. Is MS prepared to make the claim that Cheney was a compromiser?

Name one substantive policy that Obama has met his Republican opponents halfway on. The president doesn't negotiate. He lectures and preens. Blaming "extremist" Republicans in Congress for his inability to forge a deal won't cut it.

The attempt to represent Mr. Obama as an innate conciliatory man whose extreme one sided demands on today's fiscal cliff negotiations are being forced on him by the extreme positions of the evil Republicans is more than transparent, it is laughable, if not reprehensive in its dishonesty.

The clue to the whole ideological piece is given away by his characterization of the Tea Party members of Congress as "ideologically extremist". Let me remind those casual readers to whom this definition is aimed at that the Tea Party in the US is defined by its official political platform of "adhesion and respect to the Constitution, fiscal responsibility (low debt if any), smaller government, and low taxes". I let the readers make their own judgment if this is "ideologically extremist".

We need to Feed the Beast. It's the only way the size and scope of the State will ever decrease over the longer term. Make people pay for all the Government they get, and see if they think it's a good deal.

President Obama does campaign well! Other Presidents would have called all the Congressional leaders into a "Locked Room" holding firmly the keys making it clear that no one goes home for Christmas and new years until agreement is reached by their respective Political Bodies.
But, sadly no! the President is exercising the one skill he has displayed more than any other; out on the road talking and campaigning. The President is a leader, unfortunately more so a "Cheer" Leader.

In 2012, 53,952,240 votes were cast for a Democratic candidate for the House and only 53,402,643 were cast for a Republican — meaning that Democratic votes exceed Republican votes by more than half a million. So, any conclusion that the American people VOTED FOR a Republican house is JUST PLAIN WRONG.

Is there another so-called democracy in the world where the party that gets less votes retains a double digit lead in parliamentary or Congressional seats?

"Obama has a deep liberal core covered by an affable pragmatic exterior. He genuinely wants to advance liberal causes but isn't willing to take the more extreme measures his ideological brethren want him to. A restrained radical."

The second part of your post contradicts the part first. Obama really is liberal but he doesn't usually get his way. ObamaCare? Obama wanted a public option. His budget proposal? It's to the left of the centrist Bowles-Simpson's 3-to-1 cuts to revenue. Financial reform? In fact he did want to break up Citi but his own economic advisers rejected the idea. There's the terrible Buffett Rule which has faded from memory now (BTW Nate Silver recently had a great piece on why bubble rates are a very bad idea). There's the unpopular HHS mandate which Obama renegotiated. In all those instances, you know Obama's heart was bleeding but he was willing to accept "no" for an answer.

We know from the Grand Bargain negotiations that Boehner is willing to raise revenue. Graham, Chambliss, and Peter King have outright said they'll violate the Norquist pledge. Conservative commentators like Bill Kristol have given in. We've moved from a largely united Republican front against tax increases to a real question of whether Norquist is even relevant anymore. Taxes is will rise. The question is only of when and how.

Obama averted a economic implosion b/c of Republican irresponsibility. The economy is recovering in spite of Republican obstruction. He has ended one ghastly war and is on the verge of ending another. Or were the wars in Iraq and Afghanisan, pd for with credt card mentality, really huge succsses that the liberal media has put one over on us??

To start off with a racial tone is an affront to the truth about what ails Obama's inability to negotiate any kind of agreement with Congress. His complete lack of experience, perspective and common sense only serves to continually derail any chance of proper negotiation with a Congress that is much more reflective of who America is and what America wants. Obama won only because he had a better marketing machine and a 'get out the vote' initiative that bordered on the criminal. He has no mandate, only a sham of an agenda that he keeps trying to foster on an unsuspecting and unaware public, helped along by a complicit media propaganda machine. It is, quite simply, a recipe for disaster. Whatever he gets pushed through Congress will be an abject disaster for the country and if the country ever recovers from this fiasco, it will take decades. Obama is an abject disaster, a feckless sham artist and a phony of the highest order. America really effed up on this one.

What does one expect when you get mugged politically by Zealots who would rather have Jerusalem burned than co-exist with the Romans? He is apparently one Liberal who did not turn Conservative when mugged by the political reality of right wing Washington, D.C. Time enough to be a the tough negotiator this time around. America twice tossed the so-called Austerians (McCain, 2008; Romeny, 2012). Hope he doesn't kowtow to the Supply-Side Jesus Freaks!

1- The fiscal cliff is currently the only mechanism, preventing our country from certain bankruptcy due to runaway deficits, caused by short-sighted political parties, controlled by special interest groups

2- The only negative consequence of jumping the cliff will be a recession in 2013 (trivial compared to bankruptcy in 2020). A dreadful prospect to our financial speculators (who rarely look beyond the next financial quarter)

3- Anyone harboring the illusion that our political parties would be able to negotiate and legislate a better long-term economic path is hallucinating.

4- Strangely enough, both parties want to go over the cliff...

a- The Democrats have no other way of increasing taxes (given the intransigence of the Republican-controlled House). A recession in 2013 is far better than a election-year recession in 2014. And what better political reason for getting into a recession than the GOP's refusal to 'tax the billionaires'?

b- The Norquist-shackled Republicans would be committing political suicide by breaking their pledge to 'not raise taxes'. Better to have taxes raised automatically and then work feverishly to lower them again

It would be interesting to see a game theory analysis of this fight. For despite the comments we are no longer dealing with economics or policy but raw power.

Unfortunately I don't know formal game theory but let me take a layperson's stab at it.

Right now I think the public fight is boiling down to something that could easily be distilled as "Granny versus the Plutocrats". Everyone (Mr. Boehner, President Obama) wants to leave the bush tax cuts in place for the "middle class". So the tax fight is over the upper class tax rate. Even President Obama is willing to cut Medicare, which if implemented will enrage Granny (see the AARP commercials already running) and putting the onus on the Republicans to find the "excess", "the needless waste", "the fat" that will keep Granny from some treatment is pure brilliance. There are other issues, but they exist at the level of wonkery.

Finding 400 million of savings in Medicare will not be done in a smoke filled evening, or even two. Finding those cuts, or even $100 million worth in a few weeks argues for going over the cliff. Any pre January compromise has to kick that hideous can of worms down the road a year. So it becomes purely a fight over taxes.

Any compromise that avoids the "fiscal cliff" is a win for Obama and a loss for the Radical Republicans. The economy is likely to do better in that case, the Republicans then could lose some House seats, bad outcomes any way you look at it.

Any compromise that does not raise the rates on high earners will be a complete defeat for President Obama and destroy his effectiveness for the entire second term. That's a bad outcome any way you look at it.

Thus I see no way for either side to come out with a plausible "win" with the Bush tax cuts in place. Both sides have set out absolutist positions and to back down is to lose. But there is an escape hatch. Those cuts were always unsustainable; remember that's why they came with a built in sunset provision.

The fiscal cliff, the sunset provision, removes the impediment for the parties quite nicely.

As a number of writers have pointed out the Radical Republicans can maintain their state of ideological purity. By staying strong they have managed to be pushed to the place that they need to get to to have any rational effect. (There can be no grand bargain without something to bargain with.) The losses to the American economy pale in comparison to the political benefit and besides it's not a cliff, it's a gentle slope. The sequester, the awful bite, can be delayed for 3 or more months.

Going over the cliff is a win for the Democrats. Taxes up so they are tough on deficits; get rid of that club the Republicans have been so happy to use. The Republicans were in the driver's seat when they drove the US over the cliff, the Public won't forget that. The sequester can be delayed and then the Republican House can "force" through their anti sequester act and the Democrats can be narrowly defeated in the Senate in the name of national security. The US is still at war and the biggest cuts are to the DoD.

Medicare gets kicked down the road to 2014 where the massive Republican landslide predicted by the Republican advisors or the slow whittling away of their majority in the House predicted by Ms Pelosi will make all the difference.

The parties fight over who gets the credit for the almost unanimous tax cut for the middle class. Both sides want that.

Everybody who counts wins, or at least does not lose if the US goes over "the fiscal cliff".